A new age of mining: Historic UK industry on the verge of renaissance

As the gates were finally slammed shut at Hatfield Colliery near Doncaster last week, Britain’s coal mining industry appears to be on its last breath.

Hatfield Colliery has finally stopped producing coal, one of the last deep mines in the country to do so.

The closure of the employee-owned mine in South Yorkshire, with around 500 workers, will be followed by Britain’s remaining deep mines, Kellingley in North Yorkshire and Thoresby in Nottinghamshire. Owned by UK Coal, they are both due to close later this year.

Coal mining has suffered from competition from cheaper markets from South America to Russia, while also being crippled by the move to reduce the carbon footprint of developed nations.

But while traditional coal mining is dying, there are some rays of hope for Britain’s mining heritage. Last month, at a meeting attended by hundreds in Sneaton Castle in Whitby, a £1.7bn potash mine under the North York Moors National Park controversially got the go-ahead. There could still be an appeal, but AIM-listed Sirius, run by Australian Chris Fraser, is in the process of putting together a financing plan with investment bank Moelis to get the complex project started.

Sirius said the first phase of the financing aims to raise around £650m in equity and debt.

This won’t be easy: building a mile-deep shaft under the North York Moors as well as a 23-mile tunnel to take the fertiliser product to Teesside for export will cost up to £2bn.

The firm may need to issue new shares, which could dilute existing shareholders and it could be years away before it is actually completed. Sirius isn’t the only potash mine in the area.

Boulby Potash Mine has been producing potash for 40 years but on a small scale. But Sirius’ plan to mine polyhalite – a largely untested version of potash for fertiliser – is risky.

John Meyer, analyst at SP Angel, says: ‘We think Sirius will get financed and should start construction in the next few years. The key risk, for us, is the need to develop the end market for the particular type of fertilizer product they plan to produce. I am sure the product will sell in time but sometimes it is not the best idea to be the first to develop this type of market.’ But Sirius’ York Potash Project is just one example of the mines that could thrive in the 21st century.

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Tin mining in Devon and Cornwall traces its roots back to the 16th century but had pretty much disappeared by the 1930s. But Wolf Minerals is about to put its tungsten and tin mine into full production – the first tungsten mine in the UK since the Second World War. Meyer says the UK ‘is a mining friendly destination.’

Numis mining expert Matthew Hasson agrees: ‘Mining is making a comeback in the UK. The UK has highly skilled workers and a workforce that is cheaper than Australia and equipment can be ordered and delivered quickly. Wolf Minerals’ tungsten mine in Devon has shown that it is possible to build a mine in the UK and has demonstrated the UK is open for business.’

Wolf boss, Australian Russell Clark, went to school and university here in Britain. He said: ‘When we were raising £100m last March interest was limited. People thought it was a joke. People thought mining had departed the UK under [Margaret] Thatcher.’

He added: ‘You have to be tenacious, it takes time but there a considerable benefits.

‘Workforce costs are 30 per cent cheaper than in Australia. Unlike in somewhere like Africa or China there are not security, language or food and drink issues.’

Wolf employs 500 on its site at present. There was plenty of demand for jobs with 900 applications for just 50 jobs recently.

In Northern Ireland there are two gold projects in the making.

Galantas Gold is developing an underground gold mine in Omagh, County Tyrone, which was until recently worked by open-pit methods. They got planning consent for underground mining in June and are raising money.

Dalradian Resources, also based in Tyrone, is also hoping to get permission to mine at its Curraghinalt project.

The UK still has around 2000 active mines but mainly mining aggregates and other construction minerals for the building industry. The numbers employed in the British mining industry are just a fraction compared to the industrial boom years. But as Wolf begins production this month with the first new metal mine on these shores in 45 years a new era has begun.